This is the dumb pricing mistake entrepreneurs make. Now I'll show you how to fix it.
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There's a dumb pricing mistake people make when they price their products and services...
...and it leaves a TREMENDOUS amount of money on the table.
(The weird part? This applies to all types of products. Maybe you're selling a piece of furniture... or you'er selling multiple crafts at a craft show... or maybe you're a freelance photographer or web designer...)
What is the mistake?
Watch this video and I'll explain everything.
The best part? Once you know the mistake, it's easy to fix it.
Don't take my word on it. Watch the video. See for yourself.
This takes advantage of proven psychological pricing strategies. It works for physical products - like crafts, handmade furniture - and for freelance services - like photography, web design, consulting.
Oh, and if you liked this video, HIT SUBSCRIBE!
Hey, Derek Halpern here. Hope you liked this video about pricing strategy for physical products and services. If you want to learn more, do me a favor? SUBSCRIBE TO MY CHANNEL. Thank you! http://bit.ly/WqPFyy
I;m a freelancer and i know my prices and my bills plus i work by the hours and i discount down the price to the customers yet their still complain.
People don't like to spend money they expect a free especially if you're a smart guy with I.T skills they say it cost you nothing so why should i pay you that much price...?
Time is money and i need to grab what i can if it will cost me to loss 100$ bucks to own few bucks why not it's better than getting 0$
I just adjusted my price hoping it will sell.
I used to put just 3PCs for 10SR.
Now I added two more offers that goes up to 20PCs for 30SR..
I really hope it works! I am a recently-graduated student who wishes to be a great businessman, so if any advice please tell me! ^^
This is true and it is an extremely well and long time known approach. For example, all big brands of food and rink products utilize it by introducing products on the market that serve only this very reason to act as a vehicle to focus customers on another product. However, your example is very specific and therefore will hardly be applicable to many people because not everyone can offer work in "packages".
But the price you pay for the smaller bottles ends up being more percentage wise compared to the big bottle. So even if you don't need the big one, you'll get it 'cause it has a better value and they make more money off of you since the product is much cheaper to make.
3:28 "You don't want someone telling you how much you are worth!" What do you mean with this? This is how reality works. You only worth as much as other people are willing to pay you. It is that simple.
I don't have a choice, if a client doesn't want to pay as much as I want he will simply not do it, and the story is over he keeps his money and I can't sell. I don't have any power to tell my client how much he will pay me, only he alone determines that.
This immediately made me realise that I should dump my sales strategy that I was going to use for selling my pondsludge vacuum machines (yes, I know, they have a cool name to avoid this 'word'). Thanks
hey +DerekHalpern , first time I've watched this video. However, based on previous advice just like yours, I actually made separate packages for my most expensive service - Web Design. Here's what happened... A client of mine referred me to a prospect, I had a phone consultation with him before giving price. I made 3 packages and then emailed him the quote.
Although, he's a small business owner as well, he chose the most expensive Web Design Package I currently have.
I closed the deal, and I'm working on it.
Your advice is excellent in this video, plus you gave me extra details on the psychology behind the pricing of my packages.
All I have to say is, Thanks, and this technique works.
Quick question, how do you figure out your highest price? Is there some kind of % that should be applied or you just have to kind of figure it out?
In this example it was:
15 -> + 50%
40 -> + 266%
Any input would be great. Thanks!!
We should also mention the potential downside that some customers will see the highest price and feel you're out of their range. Instead of getting your best package, they have to settle for your supposedly mediocre work. Best strategy may be to pump your highest package full of unnecessary gimmicks, bells, and whistles. That way they don't conclude that you're merely overpriced.
I love the ideas that you shared in this video, but I'm a little stuck as to how to apply this to a website where I sell handmade jewelry for $10-$30 a piece. Do I simply make sure that visitors to my site know that there are similar items available at a different price?
You could create higher end jewellery, either by increasing complication, the material costs (using higher-end materials), and tossing in a higher mark up. Just having a few examples of that work around should not only draw in some more money whenever they do sell, but have the effect mentioned in this video on your regular jewellery.
Question: In this video you suggest having three pricing options, but in your video about getting clients to buy now rather than shop around, you suggest offering two packages as optimal. Is there a tradeoff here that we need to take into consideration, such as possibly less individual sales, but more money? How would you reconcile/clarify this for us? Or am I misunderstanding?
You know what, I hate subscribing to YouTube videos. I have enough already. But damn man, you're a great source of free information. Thank you, i went through almost all of your videos before noticing that i might as well subscribe. Keep it up!
What do you think of this pricing-related theory?
Price of goods in the USA compared to the EU:
The Gini coefficient gives a measure of the income distribution of a nation's residents.
Generally, Europe has more even wealth distribution than the USA. (Search for map.) That probably influences the prices of goods because less people in the USA would have the means to buy expensive goods and the maximum profit on an item would be at a lower price point.
I do freelance graphic design. After watching I sent a client 3 packages- $1000, $1500 & $3000. I got the job to do work @ $2000. Thing is I don't if the customer would have still agreed if I did not send those package options. If just quoted flat $2000 how much more likely would they have agreed. Anyway I played it safe and used your info.
This is great advice, and I've implemented this as Bronze, Platinum and Diamond Level strategies. Few want "Bronze" Level, as that implies 3rd place. "Platinum" is great, but what can beat a Diamond? It cuts through everything! People like to BUY, but not to BE SOLD, and offering options is a great way to leverage that solution.
How do i price: I understand the client, understand if they actually know what they want. I have a price for time. But i understand exactly how much time is needed - prep, research , staff costs, the quality of the product the client needs, thinking time, invoicing time.
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